•252 MANUFACTUEES OF RUSSIA 



about 40 kopecks per poud of keroseue. The naphtha lountaius, the tendency towards 

 the exploitation and treatment of tlie crude oil, the increased importation of American 

 kerosene, and the comparatively small revenue of 100,000 to 162,000 roubles, 

 brought by the farming out of the naphtha wells, together with the introduction of 

 a civil routine after the pacitication of the Caucasus, and especially the persistent 

 scientific and mercantile indications of the possibility of founding a vast naphtha in- 

 dustry at Baku, induced the Government in 1872, to sell by auction the use of the 

 chief naphtha-bearing areas, situated in the Crown lands near Baku. The conditions 

 of sale were that the buyers were to pay a rental of 10 roubles per dessiatine for 

 the land, and an excise upon the capacity of the stills, of about 15 to 25 kopecks 

 per poud of kerosene. Xotwithstanding these onerous conditions, land for nearly three 

 million roubles was sold at the auction, and the exploitation and treatment of naphtha 

 attracted many individuals to Baku, so that in 1874 the industry of the district 

 made most rapid strides, and numerous borings were made and works erected, form- 

 ing a special suburb of Baku known as the « Black town*. Then means of transporting 

 the kerosene by sea, and along the Volga, were devised, and, what was more important, 

 the kerosene consumed in the interior began to decline in price, notwithstanding the 

 excise, while the consumption extended and gradually displaced the American article. 

 At that time, however, the quality of the Baku kerosene, and especially of that pre- 

 pared at the small works, was unsatisfactory, owing to the fact that in order to 

 diminish the excise dues, levied on the capacity of the stills and the time taken for 

 the distillation, the latter process was conducted too rapidly, and owing to the high 

 price of sulphuric acid transported from the Kama, and of caustic soda brought 

 from abroad, the refining of the raw naphtha was imperfect. Competition, also, 

 lowered the price and led to a crisis, to stop which, and at the same time facilitate 

 the development and exportation of naphtha products, the Government in 1877 re- 

 moved the excise from kerosene. In doing so the Government was guided by the results 

 of experience and by the example of the United States, where naphtha and kerosene 

 were also at first subject to an excise. 



After this the Baku naphtha industry became perfectly free, and made rapid 

 progress both in a qualitative and quantitative respect. This was greatly aided by 

 the counsels of Eussian scientific men upon the treatment of naphtha, and by the 

 formation of large enterprises, and especially of the companies of A. E. Nobel and 

 V. I. Eagozin. The first was established at Baku, and started large tank steamers 

 and vessels for transporting the naphtha and kerosene by the Caspian Sea and the Volga. 



This company also introduced a system of tank trucks upon the railways, and 

 was the first in Eussia to erect large iron reservoirs for storing the naphtha, kerosene, 

 and naphtha refuse, and to establish a foreign trade in Eussian kerosene, although 

 for this purpose it had to be transported to the ports of the Baltic and to the western 

 frontier, because at that time the Transcaucasian Eailway uniting Baku with the Black 

 Sea ports did not exist. The chief service lendered by Eagozin and Co., who 

 erected their works on the Volga, near Nizhni-Novgorod and Yaroslav, was that they 

 were the first to obtain excellent lubricating oils and cerates (unrefined vaseline) from 

 the Baku naphtha, besides kerosene of the American type. Moreover, they succeeded in 

 bringing these lubricants into use not only in Eussia but also in Western Europe. At. 

 that time, that is, at the end of the seventies and beginning of the eighties, the price 



